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HUD rejects offer but tells me what they will take - is this new?

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Mike V. Donor

Rehabber from St. Louis, Missouri

Jun 16 '09, 01:42 PM


I am bidding on my 3rd HUD home and this time when I was rejected they followed up not with a counter offer but with a statement of what they would take if I wanted to bid again. Is this a new development or have they been doing this all along and I never noticed?


Edited Jun 26 2010, 08:37


Eddie Ziv

Real Estate Investor from Studio City, California

Jun 16 '09, 02:07 PM


It's got to be something new. I bought couple of properties from HUD and had two uncompleted ones. I've never heard of that. Are those properties listed under "All offers will be considered"?


Edited Jun 26 2010, 08:37


Jim Wineinger

Real Estate Investor from ten mile, Tennessee

Jun 16 '09, 02:19 PM


I have not done any such HUD properties, but it sounds like just a little different wording to me.

For instance you offered 30k. They said no but we will take 80k if you want to bid again.

Sounds like a counter offer trying to get you to what they want. I would bet they dont have any other good offers and if you stay close to your guns with the next offer you make you might get somewhere.

If you want it, offer, offer, offer. The more time that goes by the more willing they will be to accept your offer.


Edited Jun 26 2010, 08:37


Scott M.

Real Estate Investor from Rochester Hills, Michigan

Jun 17 '09, 01:26 AM


Sounds new to me - I don't do a lot of HUD properties but it has always been a yes/no - never a counter or a suggested price.


Edited Jun 26 2010, 08:37


Tom C

Real Estate Investor from Ohio

Jun 18 '09, 04:21 AM


Same as Scott.. I have never got a counter offer back from HUD.


Edited Jun 26 2010, 08:38


Desiree Frazier

Residential Real Estate Broker from New Ipswich, New Hampshire

Jun 18 '09, 04:27 AM
1 vote


I recently went to a class given by HUD and they said that they are now sending back their "bottom line" when they reject an offer.


Edited Jun 26 2010, 08:38


Eddie Ziv

Real Estate Investor from Studio City, California

Jun 18 '09, 06:31 AM


Steve,
I read your response at the thread you posted. I guess it depends on the what firm handles the HUD properties. In the south east, it's Hooks Van Holms. Following various properties they have listed, there is very little common sense in their pricing. They have houses sitting on the market for month with the same asking price and suddenly the price drops. The most recent house I bought from them (In February) was originally listed for $32K, dropped to $27K, then to $23K and I got it for $16K. But the $32K listing seems forever.
There was another one that started with 37K, dropped all the way down to $15K with a "All offers will be considered" tag. I offered 9K but it was snatched for higher bid.


Edited Jun 26 2010, 08:38


Steve Babiak

Real Estate Investor from Audubon, Pennsylvania

Jun 18 '09, 06:51 AM


Eddie,

Hooks Van Holm handles my region and state too.

Face it, in the post-foreclosure properties, the listing agent wants to get as high a price as possible - to get as high a commission as possible.

At some point, the only offers that come in are all lower than the listed price, and somebody working for the seller has an awakening and makes the adjustment.

Whether HUD or REO, this is what seems to happen.

As an REO listing agent said to me the other day, even the listing agent doesn't know when that will happen - but they expect that it will at some point in most cases. And the sellers of these post-foreclosure houses are still hoping that some clueless newb will pay asking to get into a deal. As long as this also happens, expect price adjustments to be somewhat unpredictable.

But stay the course, and keep making offers that will be profitable for you.


Edited Jun 26 2010, 08:38


Steve Babiak, Redeeming Properties, LLC
Telephone: 6109082183
...


Jon Klaus Moderator Donor

Real Estate Investor from Garland, Texas

Jun 18 '09, 06:56 AM


I've made 60-70 HUD offers recently, and they've come back on 5 or 6 telling me no, but they will consider $xxx. I've gotten 5 of of my slew of offers accepted.


Edited Jun 26 2010, 08:38


Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545
Website: http://www.sellpropertyfast.com


Anson Young Verified

Real Estate Investor from Denver, Colorado

Jun 18 '09, 07:16 AM


Originally posted by Steve Babiak:
Eddie,

Hooks Van Holm handles my region and state too.

Face it, in the post-foreclosure properties, the listing agent wants to get as high a price as possible - to get as high a commission as possible.

At some point, the only offers that come in are all lower than the listed price, and somebody working for the seller has an awakening and makes the adjustment.

Whether HUD or REO, this is what seems to happen.

As an REO listing agent said to me the other day, even the listing agent doesn't know when that will happen - but they expect that it will at some point in most cases. And the sellers of these post-foreclosure houses are still hoping that some clueless newb will pay asking to get into a deal. As long as this also happens, expect price adjustments to be somewhat unpredictable.

But stay the course, and keep making offers that will be profitable for you.


I will have to 100% disagree with this, as an agent on a large REO team (top 2 in the state) and knowing the biggest HUD agent in the state (over 1700 properties sold between us last year). The real name of the game is volume, if the seller reduces the price by even $10k, we really only loose $250. But if it sells fast at whatever price, it means we get another assignment or two faster. I can say, we honestly dont care about price reductions, we welcome them as it moves the property faster and we move on to the next asset. You might be talking about the 'basement' REO agent with less than 10 listings who is counting every penny. They are not the real players, they should be aggressive with their BPO prices so they can move the inventory faster.


Edited Jun 26 2010, 08:38


Medium_anson_property_group_copyAnson Young, Anson Property Group
Telephone: 303-475-9999


Eddie Ziv

Real Estate Investor from Studio City, California

Jun 18 '09, 07:28 AM


Anson,
You may be right with regard to REOs since those properties are handled by different agents and agencies, but HUD is handled by regions and a large firms Like Hooks Van Holms are the only one that list and control prices in those particular markets. I don't see how "moving properties fast" reconciles with the fact that properties on the HVH site, sit what seems to be forever before prices drop and then they sell. In the market I buy, properties started moving faster recently because traditionally the spring and the summer are better for the market, but until two months ago, the picture was different.


Edited Jun 26 2010, 08:38


Desiree Frazier

Residential Real Estate Broker from New Ipswich, New Hampshire

Jun 18 '09, 08:25 AM


I'm up in New England and the company that handles HUD up here is Cityside Mangement Corp. They are the ones that told us that they are sending back their bottom line on the rejections.

They also told us that about every 30 days or so they will drop the price according to the local market, basically 7-10%.

At the end of about 6 months it then gets offered to the city for $1. The city must also qualify for the property by having a use for it, or donating it to a Good Neighbor program.

If the city does not take it, it does go back on.

Priority is ALWAYS given to the owner occupied. Even if their bid is lower than an investors (to an extent).


Edited Jun 26 2010, 08:39


Jon Klaus Moderator Donor

Real Estate Investor from Garland, Texas

Jun 18 '09, 09:57 AM


"Priority is ALWAYS given to the owner occupied. Even if their bid is lower than an investors (to an extent). "

This is my experience. Last week I bid more than asking on 2 properties and lost them both to owner occupants who bid less than asking. I rarely bid asking, but these were priced much lower than usual.


Edited Jun 26 2010, 08:39


Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545
Website: http://www.sellpropertyfast.com


Jon Klaus Moderator Donor

Real Estate Investor from Garland, Texas

Jun 18 '09, 10:07 AM


"but these were priced much lower than usual."

Which brings up another issue--pricing disparity. I have seen comparable homes in the same area priced at $30K and $50K for homes that were virtually the same value. The $30K home sells first time offered while the $50K languishes and finally sells after a few months and a few reductions. Who is pricing them and why are they so bad at it? Or is there some hidden purpose for this disparate pricing?


Edited Jun 26 2010, 08:39


Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545
Website: http://www.sellpropertyfast.com


Mike V. Donor

Rehabber from St. Louis, Missouri

Jul 02 '09, 03:22 AM


Update, I made the same offer for the third time (this time after a 10% price reduction) and now have a contract on the house. For all you data freaks out there, my offer was 85% of the newly reduced price and was accepted in the morning of the first day of allowed bidding.


Edited Jun 26 2010, 08:49


Account Closed

California

Jul 02 '09, 03:31 AM


This may be new to HUD but is now very common on most lender REOs. They are attempting to perform "Loss Mitigation" to maximize their dollars to reduce losses. We have made 5 offers on REOs and the ones accepted were immediately re-listed at the higher prices we had accepted with the REO sellers having the right to drop our contracts and accept any other higher or better offer up to the time of our escrow closing...so we can't count on closing our deal until it actually records. Using our offers to leverage for higher sales prices...


Edited Jun 26 2010, 08:49


Jon Klaus Moderator Donor

Real Estate Investor from Garland, Texas

Jul 02 '09, 03:34 AM


"Update, I made the same offer for the third time (this time after a 10% price reduction) and now have a contract on the house. For all you data freaks out there, my offer was 85% of the newly reduced price and was accepted in the morning of the first day of allowed bidding. "

Congratulations! How much are you paying and what will you do with the property? What is it's ARV? What will it rent for?

I have submitted 9 HUD offers today, ranging from 70% to 108% of asking. I expect that I will get between 0 and 2 accepted.



Edited Jun 26 2010, 08:49 by Jon Klaus


Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545
Website: http://www.sellpropertyfast.com


Corey Demuth

Real Estate Investor from Queens, New York

Jul 02 '09, 03:37 AM


can someone briefly explain HUD vs REO


Edited Jun 26 2010, 08:49


Jon Klaus Moderator Donor

Real Estate Investor from Garland, Texas

Jul 02 '09, 03:42 AM


HUD--has been foreclosed on and ownership has gone back to the Dept. of HUD, most likely because it was an FHA guaranteed mortgage that defaulted.

REO--foreclosure owned by the bank.


Edited Jun 26 2010, 08:49


Jon Klaus, SellPropertyFast
E-Mail: [email protected]
Telephone: 214-929-6545
Website: http://www.sellpropertyfast.com


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